Matsushita Profits Drop, Toshiba Has Bigger Loss On Falling Electronics Prices

Profit at Matsushita, which makes the Panasonic brand, dropped for the three months ended June 30 to 2.7 billion yen ($22 million) from 3.5 billion yen as sluggish sales in North America undercut solid sales in China, Europe and Japan.

Group sales edged down 2 percent to 1.76 trillion yen ($14.7 billion) from 1.79 trillion yen a year ago.

Toshiba reported a loss of 36.8 billion yen ($307 million) for the quarter in contrast to a loss of 18.8 billion yen a year ago.

Sales dipped 6 percent to 1.12 trillion yen ($9.3 billion) from 1.19 trillion yen.

"The biggest problem for Japanese electronics is low prices," Tetsuya Kawakami, Matsushita managing director, told reporters at the Tokyo Stock Exchange. "Making profits is tough."

Matsushita said the results were better than initial expectations with growth in plasma display panels, mobile phones and digital video disc recorders. But sales were down in almost all key sectors including the audiovideo products and home appliances and other devices.

The Osaka-based company has been focusing on a streamlined product lineup, including hot sellers that can grab significant market share and fight the onslaught of cheaper products from Asian rivals.

Cost cutting added to profits. Overseas sales were down 4 percent at 939 billion yen ($7.8 billion), while Japan sales were up 2 percent to 825 billion yen ($6.9 billion), Matsushita said.

Sadazumi Ryu, a Toshiba senior vice president, said his company sold more PCs both at home and abroad in the April-June period, but that didn't translate into profits because of falling prices, triggered in part by lower prices at Hewlett-Packard.

Toshiba sales faltered in digital products, devices and home appliances, and Ryu acknowledged the company had fallen behind in flat panel TVs and DVD recorders. One hope was its computer-chip division, where growing demand for digital cameras and mobile phones is helping boost profits, he said.

Toshiba's Japan sales rose 2 percent to 697 billion yen ($5.8 billion) while overseas sales fell 18 percent to 420 billion yen ($3.5 billion). In North America, sales tumbled 30 percent to 143 billion yen ($1.2 billion) as PC and TV prices nose-dived, Toshiba said.

Both companies promised better times.

For the fiscal year ending March 2004, Matsushita forecast a profit of 30 billion yen ($250 million) versus a loss of 19.5 billion yen last year. Fiscal 2003 sales were expected at 7.5 trillion yen ($63 billion), up from 7.4 trillion yen.

Toshiba, which returned to profitability in fiscal 2002, forecast a profit of 40 billion yen ($334 million) for the year, up from 18.5 billion yen last year, on sales of 5.7 trillion yen ($47.5 billion), up from 5.66 trillion yen.

Last week, Sony Corp. reported a 98 percent dive in profit to 1.1 billion yen ($9 million) for the April-June quarter from a year ago. On Tuesday, Fujitsu reported a loss of 39.8 billion yen ($332 million) for the quarter.

On the Tokyo Stock Exchange, Matsushita closed down 5 percent at 1,410 yen ($12) shortly before earnings were announced. Toshiba closed down 8 percent at 460 yen ($4) after the company released earnings, which helped push down Tokyo share prices.

Matsushita profits drop, Toshiba has bigger loss on falling electronics prices

YURI KAGEYAMA

AP Business Writer

TOKYO (AP) _ Matsushita Electric Industrial Co. on Wednesday reported a 22 percent drop in profits for the first fiscal quarter and Toshiba Corp.'s losses nearly doubled from a year ago as diving prices continued to hammer Japanese electronics makers.

Profit at Matsushita, which makes the Panasonic brand, dropped for the three months ended June 30 to 2.7 billion yen ($22 million) from 3.5 billion yen as sluggish sales in North America undercut solid sales in China, Europe and Japan.

Group sales edged down 2 percent to 1.76 trillion yen ($14.7 billion) from 1.79 trillion yen a year ago.

Toshiba reported a loss of 36.8 billion yen ($307 million) for the quarter in contrast to a loss of 18.8 billion yen a year ago.

Sales dipped 6 percent to 1.12 trillion yen ($9.3 billion) from 1.19 trillion yen.

'The biggest problem for Japanese electronics is low prices,' Tetsuya Kawakami, Matsushita managing director, told reporters at the Tokyo Stock Exchange. 'Making profits is tough.'

Matsushita said the results were better than initial expectations with growth in plasma display panels, mobile phones and digital video disc recorders. But sales were down in almost all key sectors including the audiovideo products and home appliances and other devices.

The Osaka-based company has been focusing on a streamlined product lineup, including hot sellers that can grab significant market share and fight the onslaught of cheaper products from Asian rivals.

Cost cutting added to profits. Overseas sales were down 4 percent at 939 billion yen ($7.8 billion), while Japan sales were up 2 percent to 825 billion yen ($6.9 billion), Matsushita said.

Sadazumi Ryu, a Toshiba senior vice president, said his company sold more PCs both at home and abroad in the April-June period, but that didn't translate into profits because of falling prices, triggered in part by lower prices at Hewlett-Packard.

Toshiba sales faltered in digital products, devices and home appliances, and Ryu acknowledged the company had fallen behind in flat panel TVs and DVD recorders. One hope was its computer-chip division, where growing demand for digital cameras and mobile phones is helping boost profits, he said.

Toshiba's Japan sales rose 2 percent to 697 billion yen ($5.8 billion) while overseas sales fell 18 percent to 420 billion yen ($3.5 billion). In North America, sales tumbled 30 percent to 143 billion yen ($1.2 billion) as PC and TV prices nose-dived, Toshiba said.

Both companies promised better times.

For the fiscal year ending March 2004, Matsushita forecast a profit of 30 billion yen ($250 million) versus a loss of 19.5 billion yen last year. Fiscal 2003 sales were expected at 7.5 trillion yen ($63 billion), up from 7.4 trillion yen.

Toshiba, which returned to profitability in fiscal 2002, forecast a profit of 40 billion yen ($334 million) for the year, up from 18.5 billion yen last year, on sales of 5.7 trillion yen ($47.5 billion), up from 5.66 trillion yen.

Last week, Sony Corp. reported a 98 percent dive in profit to 1.1 billion yen ($9 million) for the April-June quarter from a year ago. On Tuesday, Fujitsu reported a loss of 39.8 billion yen ($332 million) for the quarter.

On the Tokyo Stock Exchange, Matsushita closed down 5 percent at 1,410 yen ($12) shortly before earnings were announced. Toshiba closed down 8 percent at 460 yen ($4) after the company released earnings, which helped push down Tokyo share prices.

Matsushita profits drop, Toshiba has bigger loss on falling electronics prices

YURI KAGEYAMA

AP Business Writer

TOKYO (AP) _ Matsushita Electric Industrial Co. on Wednesday reported a 22 percent drop in profits for the first fiscal quarter and Toshiba Corp.'s losses nearly doubled from a year ago as diving prices continued to hammer Japanese electronics makers.

Profit at Matsushita, which makes the Panasonic brand, dropped for the three months ended June 30 to 2.7 billion yen ($22 million) from 3.5 billion yen as sluggish sales in North America undercut solid sales in China, Europe and Japan.

Group sales edged down 2 percent to 1.76 trillion yen ($14.7 billion) from 1.79 trillion yen a year ago.

Toshiba reported a loss of 36.8 billion yen ($307 million) for the quarter in contrast to a loss of 18.8 billion yen a year ago.

Sales dipped 6 percent to 1.12 trillion yen ($9.3 billion) from 1.19 trillion yen.

'The biggest problem for Japanese electronics is low prices,' Tetsuya Kawakami, Matsushita managing director, told reporters at the Tokyo Stock Exchange. 'Making profits is tough.'

Matsushita said the results were better than initial expectations with growth in plasma display panels, mobile phones and digital video disc recorders. But sales were down in almost all key sectors including the audiovideo products and home appliances and other devices.

The Osaka-based company has been focusing on a streamlined product lineup, including hot sellers that can grab significant market share and fight the onslaught of cheaper products from Asian rivals.

Cost cutting added to profits. Overseas sales were down 4 percent at 939 billion yen ($7.8 billion), while Japan sales were up 2 percent to 825 billion yen ($6.9 billion), Matsushita said.

Sadazumi Ryu, a Toshiba senior vice president, said his company sold more PCs both at home and abroad in the April-June period, but that didn't translate into profits because of falling prices, triggered in part by lower prices at Hewlett-Packard.

Toshiba sales faltered in digital products, devices and home appliances, and Ryu acknowledged the company had fallen behind in flat panel TVs and DVD recorders. One hope was its computer-chip division, where growing demand for digital cameras and mobile phones is helping boost profits, he said.

Toshiba's Japan sales rose 2 percent to 697 billion yen ($5.8 billion) while overseas sales fell 18 percent to 420 billion yen ($3.5 billion). In North America, sales tumbled 30 percent to 143 billion yen ($1.2 billion) as PC and TV prices nose-dived, Toshiba said.

Both companies promised better times.

For the fiscal year ending March 2004, Matsushita forecast a profit of 30 billion yen ($250 million) versus a loss of 19.5 billion yen last year. Fiscal 2003 sales were expected at 7.5 trillion yen ($63 billion), up from 7.4 trillion yen.

Toshiba, which returned to profitability in fiscal 2002, forecast a profit of 40 billion yen ($334 million) for the year, up from 18.5 billion yen last year, on sales of 5.7 trillion yen ($47.5 billion), up from 5.66 trillion yen.

Last week, Sony Corp. reported a 98 percent dive in profit to 1.1 billion yen ($9 million) for the April-June quarter from a year ago. On Tuesday, Fujitsu reported a loss of 39.8 billion yen ($332 million) for the quarter.

On the Tokyo Stock Exchange, Matsushita closed down 5 percent at 1,410 yen ($12) shortly before earnings were announced. Toshiba closed down 8 percent at 460 yen ($4) after the company released earnings, which helped push down Tokyo share prices.